The legal industry stands at a crossroads in its adoption of AI. While 96% of legal departments have emphasized that ROI is the biggest factor in adopting AI, fewer than one-third have successfully harnessed its full potential.
Legal and contracting teams are facing challenges in moving beyond the initial phase of ideation and experimentation. In fact, 56% of legal teams are still working on early-stage prototypes rather than fully deploying these tools for real business outcomes.
In the previous installment of this blog series, we identified that one of the main reasons many organizations are missing the opportunity to capture the broader value of AI is their narrow focus on cost savings, rather than the full spectrum of Return on AI (ROAI). This includes emphasizing faster contract cycles, improved risk mitigation, and richer, data-driven insights.
In this article, we’ll explore eight practical strategies that businesses can implement to jumpstart their ROAI journey. These strategies are mainly quick wins and near-term initiatives that can drive immediate value, while setting the foundation for long-term success.
Strategy 1: Start with Highest-Volume, Lowest-Risk Contracts
Backlogs of repetitive, standardized contracts, such as NDAs and vendor renewals, are among the most common bottlenecks that slow down the contracting process. But because these contracts are high-volume and low-risk, they offer a more scalable entry point for automation, making them an ideal initial target for GenAI-powered contract automation.
Start with these types of contracts to give your teams quick wins like auto-populating standard clauses and handling routine redlines. When paired with a light-touch internal review, this approach keeps risk low while delivering measurable improvements in cycle times. Doing so allows your teams to see immediate improvements in turnaround time.
Strategy 2: Build or Refine an AI-Powered Clause Library
87% of legal departments report that managing data from contracts with dispersed language and inconsistent playbooks is a challenge.
This lack of a centralized, authoritative source of truth creates a downstream effect: an increased risk of errors and non-compliance, coupled with operational inefficiencies. Teams may be wasting time searching and duplicating efforts, and further causing longer negotiation cycles.
A strategic way for legal teams to tackle this is by establishing or refining (if there’s already an existing one) an AI-powered clause library. It’s a curated and centralized repository of standardized contractual positions, allowing AI tools to quickly insert, check, and revise contracts.
Support this step further by designating a “clause curator” or a small working group that will focus on continuously updating the library with the latest regulatory and corporate changes. This is particularly crucial in healthcare, finance, and investment industries, where regulations change frequently.
Over time, this GenAI-powered clause library becomes a knowledge hub that scales across the organization, allowing teams to keep pace with the changing legal and business requirements with greater accuracy and efficiency.
Strategy 3: Enable Real-Time Risk Scoring
Traditionally, risks in contracts might only be spotted toward the end of the review process—or, in some cases, after a contract has already been signed. This reactive state can lead to delays and renegotiations, ultimately leading to missed opportunities.
Real-time risk scoring is changing the game. According to the EY study, 75% of respondents say refining their technology strategy is a high priority, and real-time risk scoring is a key part of that strategy.
Use AI-based risk assessment tools to automatically flag non-standard clauses, unusual liability caps, or potentially non-compliant language in contracts. Share real-time risk alerts across cross-functional teams, including procurement and senior leadership, so that you get to have streamlined approvals, reduced frictions, and you can better reinforce transparency about potential red flags.
Surfacing these issues early helps avoid protracted renegotiations, thereby speeding up deal closure and capturing the full value of each contract.
Strategy 4: Integrate Contract Data with Core Business Systems
One of the reasons for slow AI adoption in legal departments is data fragmentation. Often, contract data sits within Contract Lifecycle Management (CLM) platforms, document management systems, or even unstructured repositories like shared drives and email—making it largely disconnected from the core systems that drive daily business operations like ERP and other procurement platforms. This isolation prevents a unified view of customer and supplier relationships and hinders efficient cross-functional workflows.
Feed contract data, such as terms, renewal dates, and pricing insights, directly into core business platforms for better end-to-end analytics.
Doing so ensures all relevant stakeholders have key insights—for instance, sales teams gain visibility into negotiated discounts, while procurement teams can track supplier performance clauses more efficiently. This creates a seamless flow of information from contract request to execution, eliminating manual re-entry, thus reducing errors.
Strategy 5: Create a “Center of Excellence” (CoE) for Contracting and AI
Effectively managing AI initiatives, particularly to prevent data silos during implementation, demands dedicated focus. There’s a growing need to centralize expertise and governance in contract data, with 53% of legal teams planning to increase their reliance on internal Centers of Excellence (CoE).
Think of the CoE as the central nervous system for AI in contracting, a structured and centralized function designed to keep everything connected and moving with purpose: standardizing processes, managing AI and vendor relationships, maintaining clause libraries, ensuring compliance with internal guidance, and measuring what’s working (and what’s not). For optimal efficiency, staff your CoE with a cross-functional team comprising contract experts, data analysts, and project managers.
Your CoE’s impact goes beyond operations—it also serves as a critical guardrail for ethical and responsible AI use. For most lawyers, cybersecurity, data privacy, and intellectual property are at the top of the list of concerns when it comes to adopting AI in their work. A well-run CoE puts the right frameworks in place to help mitigate these risks.
Strategy 6: Measure Early Wins and Socialize Results
96% of legal departments say ROI is critical in tech adoption. This makes capturing and showcasing early wins extra paramount in securing buy-in for larger, more complex technology initiatives and investment decisions.
In effectively demonstrating value, you must move beyond generic claims of time and cost savings, but focus on tracking specific, quantifiable metrics directly relevant to the contracting function. The following KPIs should cover multiple dimensions of ROAI:
- Efficiency Metrics – Measure contract cycle time, time to first draft, and the throughput or the volume of contracts processed automatically or semi-automatically within the given period.
- Risk Mitigation Metrics – Measure the deviation reduction or the number/percentage of non-standard clauses flagged by AI, subsequently revised, and successfully negotiated back to standard positions. Track the consistency of contracts against approved legal playbooks. Compliance rates should also be measured against regulatory compliance or internal policies facilitated by AI checks.
- Quality and Value Metrics – Quantify the value leakage reduction by tracking missed obligations, penalties, or unfavorable terms identified and prevented by AI post-signature. Measure the frequency of achieving preferred clauses or commercial terms through AI-assisted negotiation. Gauge the levels of internal users (legal professionals, business stakeholders) with the AI tools and processes.
Collecting the data above is only half the battle; the next step is to share the findings regularly and transparently with leadership and other relevant stakeholders. Use formats like internal case studies, showcasing specific successes, or monthly/quarterly performance reports can be effective. Remember to highlight not just the metrics themselves but also the tangible business benefits they represent and how they align with overall organizational goals.
Strategy 7: Invest in Upskilling and Cultural Readiness
There is widespread recognition of the need to upskill legal teams to effectively work with AI. Ultimately, it’s the users who determine the success of a technology’s integration. 64% of teams plan to upskill their teams for AI. CLOs are also emphasizing the need for their teams to develop greater business acumen, highlighting a broader skills evolution.
Despite this awareness, a large majority of legal leaders still cite skills gaps as a primary barrier to GenAI adoption.
Bridging this gap requires targeted investment in developing specific skillsets beyond traditional legal expertise. Invest in training programs that are practical and role-specific. Initial sessions can focus on “AI Basics for Contract Managers,” followed by more specialized training on specific tools or tasks.
Crucially, the messaging around training should position AI as an enabler—a sophisticated assistant or “insanely well-read paralegal” —that supports human capabilities, freeing professionals from repetitive tasks like basic drafting and initial review to higher-value activities like complex negotiations and vendor relationship management.
Framing AI as a collaborator rather than a replacement helps alleviate anxieties about job security and fosters greater acceptance.
Strategy 8: Expand AI’s Role into Post-Signature Management
While initial AI efforts in contracting have rightly focused on pre-signature gains — automating drafting, accelerating review, streamlining negotiation for faster turnaround — focusing exclusively on them overlooks a vast reservoir of potential ROAI residing in the post-signature or the stage where real cost savings and risk avoidance can materialize.
This “contract value leakage” can be a massive drain. In fact, companies lose an average of 8.6% of their contract value every year due to performance stage slip-ups. This leakage hits in many ways: missed renewal deadlines costing you, unenforced counterparty duties (like service levels), unclaimed rebates, overlooked penalties, and more.
Expand your AI use with the following quick steps to proactively manage value leakage from executed contracts:
- Use AI for obligation extraction and tracking. AI can categorize key dates (expirations, renewals, notice periods), deliverables, SLAs, reporting requirements, and other critical commitments for both parties. This data can then be used to track fulfillment of obligations.
- Leverage AI to set proactive alerts and notifications for upcoming renewal deadlines, expiration dates, critical milestones, compliance check-ins, and required notices..
This demonstration of ROAI in post-signature activities reinforces the fact that AI delivers value throughout the entire contract lifecycle, not just at signing.
Setting Your Action Plan for Better ROAI
These eight practical strategies directly tackle the common pain points that legal and general counsel teams experience when implementing AI in contracting: data silos are addressed through centralized solutions like the AI-powered clause library and the Center of Excellence; slow approvals are countered by real-time risk scoring and streamlined workflows enabled by integrated systems; and unmanaged risk is mitigated through proactive risk scoring and AI-driven post-signature obligation tracking.
Each of these approaches is designed to deliver a “quick win” or represent a near-term initiative. Make sure to select at least one of these strategies and initiate implementation with the team to get demonstrable results relatively quickly, so your team paves the way for more ambitious and sophisticated AI projects down the line.
Start small, measure the impact on key metrics (like cycle time reduction or early risk detection), and share these results internally to build momentum and secure further investment. The key is in measuring the results rigorously, communicating successes effectively to build momentum. Be sure to refine your approach based on feedback.
By embracing this holistic approach, legal and contracting teams can fundamentally transform their role within the organization – shifting from being seen as a cost center to becoming a strategic enabler for the business.